During the COVID-19 lockdowns when restaurant dining was disallowed, several restaurants in South Africa opened ghost kitchens, started online stores to sell their products, or began offering cooking classes and dining experiences from their homes. After the lockdown restrictions were lifted, restaurants began to view these avenues as viable revenue streams to supplement their dine-in income. Despite their limited contribution to overall restaurant turnover, they still have several advantages that go beyond the monetary aspect.

Harnessing in-house capabilities to garner extra revenue

From online stores, in-house delis, workshops and masterclasses to private catering, weekend market pop-ups and private wine tasting events, there are multiple revenue streams for restaurants to explore. Such options also encourage interactivity between the customer and restaurant brand, pique customer interest by giving them something ‘extra’ to look forward to, and lead to increased word-of-mouth publicity, thereby amplifying restaurant footfall.

Workshops and masterclasses

One of the best ways to attract customers to a restaurant is by offering a unique experience, like a specialised workshop. One such example is Old Town Italy, which hosts regular pizza- and pasta-making workshops at its Durban and Cape Town outfits, which are a hit with customers.

 

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“We started the pizza- and pasta-making workshops in 2021, about six months after the restaurant opened. Both workshops are usually sold out two months in advance. We also host workshops for corporates, private groups and individuals. Additionally, we have a ‘Cookies & Cream’ kiddies class that is held five to six times a year,” says Peter Wernich, Area Manager for Old Town Italy in High Constantia, Cape Town.

Peter claims that these workshops contribute about 8% of the restaurant’s turnover and have led to an increase in dine-in patrons due to the interest they evoke, as is evident from customer reviews. Apart from the interactive experience with a professional chef, these workshops also help alleviate participants’ intimidation at making pizzas and pasta from scratch.

Additionally, the restaurant provides a unique take-away dining experience to customers, where they can bring in their own utensils and have them filled with restaurant dishes to be enjoyed at home or for their private dinner parties. Old Town Italy in Durban also has a market with a butchery, cheese station, deli, bakery, gelato counter and homeware section, apart from the restaurant.

Sisters Nadia Lüdi and Regina Grobler, owners of Cape Town-based Alpine Deli & Eatery, started pasta masterclasses from their home in August 2020, before opening their restaurant two years later. Avers Nadia, “From a bit of research, we realised that people love an experience, especially after COVID-19. The feedback has been overwhelming. The classes at our restaurant are booked for a year!”

 

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Nadia says that customers are encouraged to make their own pasta after attending the class and tasting the difference between store-bought pasta and the handmade version. This further ignites the sisters’ passion to keep innovating. Besides the extra revenue, Nadia claims that the classes have helped increase Alpine’s popularity since there are no other restaurants in Durbanville or surrounds offering this experience. Alpine Deli & Eatery also has an online store selling a range of vegan, banting, keto and gluten-free products, as well as frozen low-carb ready-made meals.

Online and in-house stores

At Johannesburg-based Ba-Pita and Njam Eatery, patrons can browse through a wide selection of imported Middle Eastern products and load up on goodies at the deli after their meal. Toerie van der Merwe, who owns both restaurants, tells us, “Due to the products being unique, it has created some excitement in the neighbourhood. We are happy to share some of our recipes (and tips) as well, when customers enquire about the products. The retail products and deli contribute about 5% of the overall turnover.” Apart from these offerings, Ba-Pita also does offsite catering for private functions, while Njam Eatery caters for school functions.

Restaurants that address a need gap in the market with differentiated offerings that can seldom be found elsewhere, also attract more patrons owing to the novelty factor. For instance, Johannesburg-based Just Teddy, which has two restaurants, an online store, an in-house store and hosts regular baking classes, is equally famous for its French pâtisserie as for its Lebanese treats, which are one of a kind.

 

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Jeffrey Teddy Zaki, director at Just Teddy, says, “An entrepreneur will always have the vision to identify what their capabilities are and what customers want, and cater accordingly, so long as it is financially viable and in line with the brand’s identity. If you have the space and manpower, you should use it. The online store, which was our lifeline during the lockdown, is an additional source of revenue now, as are the baking classes which were set up for customers wanting to immerse themselves in our baking world, especially after the launch of our cookbook Just Teddy – Petals from Paris.”

Retail sales

For Cape Town-based Nish Nush, a weekend pop-up selling Middle Eastern fare at the Neighbourgoods Market is what led to the Hummus Hatch – a take-away outlet, followed by a sit-down restaurant on Bree Street. “The Neighbourgoods Market was a great incubator to test our products, manage stock, and challenge ourselves with innovative ways to generate income. We found that our falafel was especially popular and earlier this year we started selling frozen falafel bites and falafel burgers in supermarkets and small stores in Cape Town, which have been very well received since the products are vegan, gluten-free and air-fryer friendly,” states owner Ofer Hollinger. Besides providing an additional source of income, the frozen range has increased the brand’s reach to a wider customer audience. Ofer hopes to sell his frozen falafel in stores across South Africa soon.

 

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Another success story of a restaurant thriving on retail sales as an additional revenue stream is The Vegan Chef, which has branches in Johannesburg and Durban. The brand stocks its frozen vegan product range across its restaurant outlets, has an online store, and also sells its products at select retail outlets. Additionally, it hosts the monthly Fourways Rustic & Gourmet Market at its Johannesburg venue.

“The introduction of The Vegan Chef frozen convenience range was a natural next step to provide our customers with delicious and environmentally friendly options that can be easily prepared at home. This frozen range, as well as the Fourways Rustic & Gourmet Market, have evolved as part of our longer-term strategy to diversify our revenue streams, aside from the core restaurant business,” explains Sue Gajathar, founder and CEO, The Vegan Chef. While the frozen product range contributes between 5 and 7% of the brand’s total revenues, these initiatives have also attracted new customers, while improving brand optics. “However, we also need to ensure that we focus on consistently great-tasting food, vibrant dining experiences and constant innovation to keep customers coming back,” Sue adds.

The hybrid store

The Gourmet Grocer in Johannesburg was initially established during the COVID-19 lockdown as a community marketplace for local suppliers to sell their products. Today, the grocer and café also has an onsite coffee roastery, a bakery and a deli. According to Anthony Filmalter, owner, The Gourmet Grocer, “Customers appreciate our affordable pricing and wide variety catering to diverse palates. This has definitely stimulated sales and helped to increase the average dining spend of customers.” The Gourmet Grocer is also exploring additional revenue streams, including a weekend mini food and beverage market to be launched in November.

 

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As South African restaurants continue to face unprecedented challenges, they have risen to the occasion by seeking creative solutions and innovative revenue streams. What was initially born out of necessity has now evolved into exciting opportunities for growth and sustainability.